STATE OF NEW YORK
________________________________________________________________________
2588--A
2025-2026 Regular Sessions
IN ASSEMBLY
January 21, 2025
___________
Introduced by M. of A. PEOPLES-STOKES, BENEDETTO, STECK, LUPARDO, WOER-
NER, STIRPE, BUTTENSCHON, HEVESI, TAYLOR, CRUZ, GRIFFIN, CLARK,
LEMONDES -- read once and referred to the Committee on Higher Educa-
tion -- recommitted to the Committee on Higher Education in accordance
with Assembly Rule 3, sec. 2 -- committee discharged, bill amended,
ordered reprinted as amended and recommitted to said committee
AN ACT to amend the limited liability company law, the business corpo-
ration law, the partnership law, the education law and the public
health law, in relation to authorizing certain licensed health
services professionals to form limited liability companies
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision (a) of section 1203 of the limited liability
2 company law, as amended by chapter 475 of the laws of 2014, is amended
3 to read as follows:
4 (a) Notwithstanding the education law or any other provision of law,
5 one or more professionals each of whom is authorized by law to render a
6 professional service within the state, or one or more professionals, at
7 least one of whom is authorized by law to render a professional service
8 within the state, may form, or cause to be formed, a professional
9 service limited liability company for pecuniary profit under this arti-
10 cle for the purpose of rendering the professional service or services as
11 such professionals are authorized to practice. With respect to a profes-
12 sional service limited liability company formed to provide medical
13 services as such services are defined in article 131 of the education
14 law, each member of such limited liability company must be licensed
15 pursuant to article 131 of the education law to practice medicine in
16 this state. Notwithstanding any other provision of this section, any
17 person licensed pursuant to article 131 of the education law to practice
18 medicine and any person licensed pursuant to articles 132, 137, 140,
19 141, 143, 144, 153, 154, 155, 156, 163, 167 or subdivision 3 of section
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03034-02-6
A. 2588--A 2
1 6902 of article 139 of the education law may form, or cause to be
2 formed, a professional service limited liability company to provide
3 multidisciplinary services with one or more licensed professionals,
4 subject to the following conditions: (i) each member of such limited
5 liability company must be licensed pursuant to title eight of the educa-
6 tion law to practice such member's profession in this state; (ii) each
7 member shall only practice such member's profession as specified in such
8 member's respective professional enabling statute under title eight of
9 the education law; and (iii) any clinical integration of professional
10 practices under this section shall not alter, expand or curtail the
11 scope of practice of any of the members; provided further that: (A) no
12 member shall, directly or indirectly, interfere with the clinical judg-
13 ment or legitimate clinical practice of another member; and (B) no
14 member shall order or direct another member to practice beyond the scope
15 of such member's license. With respect to a professional service limited
16 liability company formed to provide dental services as such services are
17 defined in article 133 of the education law, each member of such limited
18 liability company must be licensed pursuant to article 133 of the educa-
19 tion law to practice dentistry in this state. With respect to a profes-
20 sional service limited liability company formed to provide veterinary
21 services as such services are defined in article 135 of the education
22 law, each member of such limited liability company must be licensed
23 pursuant to article 135 of the education law to practice veterinary
24 medicine in this state. With respect to a professional service limited
25 liability company formed to provide professional engineering, land
26 surveying, architectural, landscape architectural and/or geological
27 services as such services are defined in article 145, article 147 and
28 article 148 of the education law, each member of such limited liability
29 company must be licensed pursuant to article 145, article 147 and/or
30 article 148 of the education law to practice one or more of such
31 professions in this state. [With respect to a professional service
32 limited liability company formed to provide licensed clinical social
33 work services as such services are defined in article 154 of the educa-
34 tion law, each member of such limited liability company shall be
35 licensed pursuant to article 154 of the education law to practice
36 licensed clinical social work in this state.] With respect to a profes-
37 sional service limited liability company formed to provide creative arts
38 therapy services as such services are defined in article 163 of the
39 education law, each member of such limited liability company must be
40 licensed pursuant to article 163 of the education law to practice crea-
41 tive arts therapy in this state. With respect to a professional service
42 limited liability company formed to provide marriage and family therapy
43 services as such services are defined in article 163 of the education
44 law, each member of such limited liability company must be licensed
45 pursuant to article 163 of the education law to practice marriage and
46 family therapy in this state. With respect to a professional service
47 limited liability company formed to provide mental health counseling
48 services as such services are defined in article 163 of the education
49 law, each member of such limited liability company must be licensed
50 pursuant to article 163 of the education law to practice mental health
51 counseling in this state. With respect to a professional service limited
52 liability company formed to provide psychoanalysis services as such
53 services are defined in article 163 of the education law, each member of
54 such limited liability company must be licensed pursuant to article 163
55 of the education law to practice psychoanalysis in this state. [With
56 respect to a professional service limited liability company formed to
A. 2588--A 3
1 provide applied behavior analysis services as such services are defined
2 in article 167 of the education law, each member of such limited liabil-
3 ity company must be licensed or certified pursuant to article 167 of the
4 education law to practice applied behavior analysis in this state.] In
5 addition to engaging in such profession or professions, a professional
6 service limited liability company may engage in any other business or
7 activities as to which a limited liability company may be formed under
8 section two hundred one of this chapter. Notwithstanding any other
9 provision of this section, a professional service limited liability
10 company (i) authorized to practice law may only engage in another
11 profession or business or activities or (ii) which is engaged in a
12 profession or other business or activities other than law may only
13 engage in the practice of law, to the extent not prohibited by any other
14 law of this state or any rule adopted by the appropriate appellate divi-
15 sion of the supreme court or the court of appeals.
16 § 2. Subdivision (b) of section 1207 of the limited liability company
17 law, as amended by chapter 701 of the laws of 2023, is amended to read
18 as follows:
19 (b) With respect to a professional service limited liability company
20 formed to provide medical services as such services are defined in arti-
21 cle 131 of the education law, each member of such limited liability
22 company must be licensed pursuant to article 131 of the education law to
23 practice medicine in this state. Notwithstanding any other provision of
24 this section, any person licensed pursuant to article 131 of the educa-
25 tion law to practice medicine and any person licensed pursuant to arti-
26 cles 132, 137, 140, 141, 143, 144, 153, 154, 155, 156, 163, 167 or
27 subdivision 3 of section 6902 of article 139 of the education law may
28 form, or cause to be formed, a professional service limited liability
29 company to provide multidisciplinary services with one or more licensed
30 professionals, subject to the following conditions: (i) each member of
31 such limited liability company must be licensed pursuant to title eight
32 of the education law to practice such member's profession in this state;
33 (ii) each member shall only practice such member's profession as spec-
34 ified in such member's respective professional enabling statute under
35 title eight of the education law; and (iii) any clinical integration
36 of professional practices under this section shall not alter, expand or
37 curtail the scope of practice of any of the members; provided further
38 that: (A) no member shall, directly or indirectly, interfere with the
39 clinical judgement or legitimate clinical practice of another member;
40 and (B) no member shall order or direct another member to practice
41 beyond the scope of such member's license. With respect to a profes-
42 sional service limited liability company formed to provide dental
43 services as such services are defined in article 133 of the education
44 law, each member of such limited liability company must be licensed
45 pursuant to article 133 of the education law to practice dentistry in
46 this state. With respect to a professional service limited liability
47 company formed to provide veterinary services as such services are
48 defined in article 135 of the education law, each member of such limited
49 liability company must be licensed pursuant to article 135 of the educa-
50 tion law to practice veterinary medicine in this state. With respect to
51 a professional service limited liability company formed to provide
52 professional engineering, land surveying, architectural, landscape
53 architectural and/or geological services as such services are defined in
54 article 145, article 147 and article 148 of the education law, each
55 member of such limited liability company must be licensed pursuant to
56 article 145, article 147 and/or article 148 of the education law to
A. 2588--A 4
1 practice one or more of such professions in this state. With respect to
2 a professional service limited liability company formed to provide
3 public accountancy services as such services are defined in article 149
4 of the education law each member of such limited liability company whose
5 principal place of business is in this state and who provides public
6 accountancy services, must be licensed pursuant to article 149 of the
7 education law to practice public accountancy in this state. [With
8 respect to a professional service limited liability company formed to
9 provide licensed clinical social work services as such services are
10 defined in article 154 of the education law, each member of such limited
11 liability company shall be licensed pursuant to article 154 of the
12 education law to practice licensed clinical social work in this state.]
13 With respect to a professional service limited liability company formed
14 to provide creative arts therapy services as such services are defined
15 in article 163 of the education law, each member of such limited liabil-
16 ity company must be licensed pursuant to article 163 of the education
17 law to practice creative arts therapy in this state. With respect to a
18 professional service limited liability company formed to provide
19 marriage and family therapy services as such services are defined in
20 article 163 of the education law, each member of such limited liability
21 company must be licensed pursuant to article 163 of the education law to
22 practice marriage and family therapy in this state. With respect to a
23 professional service limited liability company formed to provide mental
24 health counseling services as such services are defined in article 163
25 of the education law, each member of such limited liability company must
26 be licensed pursuant to article 163 of the education law to practice
27 mental health counseling in this state. With respect to a professional
28 service limited liability company formed to provide psychoanalysis
29 services as such services are defined in article 163 of the education
30 law, each member of such limited liability company must be licensed
31 pursuant to article 163 of the education law to practice psychoanalysis
32 in this state. [With respect to a professional service limited liability
33 company formed to provide applied behavior analysis services as such
34 services are defined in article 167 of the education law, each member of
35 such limited liability company must be licensed or certified pursuant to
36 article 167 of the education law to practice applied behavior analysis
37 in this state.] A professional service limited liability company formed
38 to lawfully engage in the practice of public accountancy as a firm, as
39 such practice is defined under article 149 of the education law shall be
40 required to show (1) that a simple majority of the ownership of the
41 firm, in terms of financial interests and voting rights held by the
42 firm's owners, belongs to individuals licensed to practice public
43 accountancy in some state, and (2) that all members of a limited profes-
44 sional service limited liability company, whose principal place of busi-
45 ness is in this state, and who are engaged in the practice of public
46 accountancy in this state, hold a valid license issued under section
47 seventy-four hundred four of the education law. For purposes of this
48 subdivision, "financial interest" means capital stock, capital accounts,
49 capital contributions, capital interest, or interest in undistributed
50 earnings of a business entity. Although firms registered with the educa-
51 tion department may include non-licensee owners, a registered firm and
52 its owners must comply with rules promulgated by the state board of
53 regents. Notwithstanding the foregoing, a firm registered with the
54 education department may not have non-licensee owners if the firm's name
55 includes the words "certified public accountant," or "certified public
56 accountants," or the abbreviations "CPA" or "CPAs". Each non-licensee
A. 2588--A 5
1 owner of a firm that is registered under this section shall be (1) a
2 natural person who actively participates in the business of the firm or
3 its affiliated entities, or (2) an entity, including, but not limited
4 to, a partnership or professional corporation, provided each beneficial
5 owner of an equity interest in such entity is a natural person who
6 actively participates in the business conducted by the firm or its
7 affiliated entities. For purposes of this subdivision, "actively partic-
8 ipate" means to provide services to clients or to otherwise individually
9 take part in the day-to-day business or management of the firm or an
10 affiliated entity.
11 § 3. Subdivision (a) of section 1301 of the limited liability company
12 law, as amended by chapter 701 of the laws of 2023, is amended to read
13 as follows:
14 (a) "Foreign professional service limited liability company" means a
15 professional service limited liability company, whether or not denomi-
16 nated as such, organized under the laws of a jurisdiction other than
17 this state, (i) each of whose members and managers, if any, is a profes-
18 sional authorized by law to render a professional service within this
19 state and who is or has been engaged in the practice of such profession
20 in such professional service limited liability company or a predecessor
21 entity, or will engage in the practice of such profession in the profes-
22 sional service limited liability company within thirty days of the date
23 such professional becomes a member, or each of whose members and manag-
24 ers, if any, is a professional at least one of such members is author-
25 ized by law to render a professional service within this state and who
26 is or has been engaged in the practice of such profession in such
27 professional service limited liability company or a predecessor entity,
28 or will engage in the practice of such profession in the professional
29 service limited liability company within thirty days of the date such
30 professional becomes a member, or (ii) authorized by, or holding a
31 license, certificate, registration or permit issued by the licensing
32 authority pursuant to, the education law to render a professional
33 service within this state; except that all members and managers, if any,
34 of a foreign professional service limited liability company that
35 provides health services in this state shall be licensed in this state.
36 With respect to a foreign professional service limited liability company
37 which provides veterinary services as such services are defined in arti-
38 cle 135 of the education law, each member of such foreign professional
39 service limited liability company shall be licensed pursuant to article
40 135 of the education law to practice veterinary medicine. With respect
41 to a foreign professional service limited liability company which
42 provides medical services as such services are defined in article 131 of
43 the education law, each member of such foreign professional service
44 limited liability company must be licensed pursuant to article 131 of
45 the education law to practice medicine in this state. Notwithstanding
46 any other provision of this section, any person licensed pursuant to
47 article 131 of the education law to practice medicine and any person
48 licensed pursuant to articles 132, 137, 140, 141, 143, 144, 153, 154,
49 155, 156, 163, 167 or subdivision 3 of section 6902 of article 139 of
50 the education law may form, or cause to be formed, a foreign profes-
51 sional service limited liability company to provide multidisciplinary
52 services with one or more licensed professionals, subject to the follow-
53 ing conditions: (i) each member of such limited liability company must
54 be licensed pursuant to title eight of the education law to practice
55 such member's profession in this state; (ii) each member shall only
56 practice such member's profession as specified in such member's respec-
A. 2588--A 6
1 tive professional enabling statute under title eight of the education
2 law; and (iii) any clinical integration of professional practices under
3 this section shall not alter, expand or curtail the scope of practice
4 of any of the members; provided further that: (A) no member shall,
5 directly or indirectly, interfere with the clinical judgment or legiti-
6 mate clinical practice of another member; and (B) no member shall order
7 or direct another member to practice beyond the scope of such member's
8 license. With respect to a foreign professional service limited liabil-
9 ity company which provides dental services as such services are defined
10 in article 133 of the education law, each member of such foreign profes-
11 sional service limited liability company must be licensed pursuant to
12 article 133 of the education law to practice dentistry in this state.
13 With respect to a foreign professional service limited liability company
14 which provides professional engineering, land surveying, geologic,
15 architectural and/or landscape architectural services as such services
16 are defined in article 145, article 147 and article 148 of the education
17 law, each member of such foreign professional service limited liability
18 company must be licensed pursuant to article 145, article 147 and/or
19 article 148 of the education law to practice one or more of such
20 professions in this state. With respect to a foreign professional
21 service limited liability company which provides public accountancy
22 services as such services are defined in article 149 of the education
23 law, each member of such foreign professional service limited liability
24 company whose principal place of business is in this state and who
25 provides public accountancy services, shall be licensed pursuant to
26 article 149 of the education law to practice public accountancy in this
27 state. [With respect to a foreign professional service limited liability
28 company which provides licensed clinical social work services as such
29 services are defined in article 154 of the education law, each member of
30 such foreign professional service limited liability company shall be
31 licensed pursuant to article 154 of the education law to practice clin-
32 ical social work in this state.] With respect to a foreign professional
33 service limited liability company which provides creative arts therapy
34 services as such services are defined in article 163 of the education
35 law, each member of such foreign professional service limited liability
36 company must be licensed pursuant to article 163 of the education law to
37 practice creative arts therapy in this state. With respect to a foreign
38 professional service limited liability company which provides marriage
39 and family therapy services as such services are defined in article 163
40 of the education law, each member of such foreign professional service
41 limited liability company must be licensed pursuant to article 163 of
42 the education law to practice marriage and family therapy in this state.
43 With respect to a foreign professional service limited liability company
44 which provides mental health counseling services as such services are
45 defined in article 163 of the education law, each member of such foreign
46 professional service limited liability company must be licensed pursuant
47 to article 163 of the education law to practice mental health counseling
48 in this state. With respect to a foreign professional service limited
49 liability company which provides psychoanalysis services as such
50 services are defined in article 163 of the education law, each member of
51 such foreign professional service limited liability company must be
52 licensed pursuant to article 163 of the education law to practice
53 psychoanalysis in this state. [With respect to a foreign professional
54 service limited liability company which provides applied behavior analy-
55 sis services as such services are defined in article 167 of the educa-
56 tion law, each member of such foreign professional service limited
A. 2588--A 7
1 liability company must be licensed or certified pursuant to article 167
2 of the education law to practice applied behavior analysis in this
3 state.] A foreign professional service limited liability company formed
4 to lawfully engage in the practice of public accountancy as a firm, as
5 such practice is defined under article 149 of the education law shall be
6 required to show (1) that a simple majority of the ownership of the
7 firm, in terms of financial interests and voting rights held by the
8 firm's owners, belongs to individuals licensed to practice public
9 accountancy in some state, and (2) that all members of a foreign limited
10 professional service limited liability company, whose principal place of
11 business is in this state, and who are engaged in the practice of public
12 accountancy in this state, hold a valid license issued under section
13 seventy-four hundred four of the education law. For purposes of this
14 subdivision, "financial interest" means capital stock, capital accounts,
15 capital contributions, capital interest, or interest in undistributed
16 earnings of a business entity. Although firms registered with the
17 education department may include non-licensee owners, a registered firm
18 and its owners must comply with rules promulgated by the state board of
19 regents. Notwithstanding the foregoing, a firm registered with the
20 education department may not have non-licensee owners if the firm's name
21 includes the words "certified public accountant," or "certified public
22 accountants," or the abbreviations "CPA" or "CPAs". Each non-licensee
23 owner of a firm that is registered under this section shall be (1) a
24 natural person who actively participates in the business of the firm or
25 its affiliated entities, or (2) an entity, including, but not limited
26 to, a partnership or professional corporation, provided each beneficial
27 owner of an equity interest in such entity is a natural person who
28 actively participates in the business conducted by the firm or its
29 affiliated entities. For purposes of this subdivision, "actively partic-
30 ipate" means to provide services to clients or to otherwise individually
31 take part in the day-to-day business or management of the firm or an
32 affiliated entity.
33 § 4. Paragraph (a) of section 1503 of the business corporation law, as
34 amended by chapter 475 of the laws of 2014, is amended to read as
35 follows:
36 (a) Notwithstanding any other provision of law, (i) one or more indi-
37 viduals duly authorized by law to render the same professional service
38 within the state may organize, or cause to be organized, a professional
39 service corporation for pecuniary profit under this article for the
40 purpose of rendering the same professional service, except that one or
41 more individuals duly authorized by law to practice professional engi-
42 neering, architecture, landscape architecture, land surveying or geology
43 within the state may organize, or cause to be organized, a professional
44 service corporation or a design professional service corporation for
45 pecuniary profit under this article for the purpose of rendering such
46 professional services as such individuals are authorized to practice,
47 and (ii) one or more individuals licensed to practice pursuant to arti-
48 cle one hundred thirty-one and one or more individuals licensed pursuant
49 to articles one hundred thirty-two, one hundred thirty-seven, one
50 hundred forty, one hundred forty-one, one hundred forty-three, one
51 hundred forty-four, one hundred fifty-three, one hundred fifty-four, one
52 hundred fifty-five, one hundred fifty-six, one hundred sixty-three, one
53 hundred sixty-seven or subdivision three of section six thousand nine
54 hundred two of article one hundred thirty-nine of title eight of the
55 education law may organize, or cause to be organized, for business
56 purposes only, a professional service corporation formed for pecuniary
A. 2588--A 8
1 profit under this article for the purpose of rendering multidisciplinary
2 services within such a corporation as such individuals are authorized to
3 practice individually in such individual's respective professions,
4 subject to the following conditions: (A) individual who organizes, or
5 causes to organize, such corporation must be licensed pursuant to title
6 eight of the education law to practice such individual's profession in
7 this state; (B) each member shall only practice such member's profession
8 as specified in such member's respective professional enabling statute
9 under title eight of the education law; and (C) any clinical integration
10 of professional practices under this section shall not alter, expand or
11 curtail the scope of practice of any of the members; (D) no individual
12 shall, directly or indirectly, interfere with the clinical judgment or
13 legitimate clinical practice of another individual; and (E) no individ-
14 ual shall order or direct another individual to practice beyond the
15 scope of such individual's license.
16 § 5. Subdivision (q) of section 121-1500 of the partnership law, as
17 amended by chapter 701 of the laws of 2023, is amended to read as
18 follows:
19 (q) Each partner of a registered limited liability partnership formed
20 to provide medical services in this state must be licensed pursuant to
21 article 131 of the education law to practice medicine in this state [and
22 each]. Notwithstanding any other provision of this section, any person
23 licensed pursuant to article 131 of the education law to practice medi-
24 cine and any person licensed pursuant to articles 132, 137, 140, 141,
25 143, 144, 153, 154, 155, 156, 163, 167 or subdivision 3 of section 6902
26 of article 139 of the education law may form, or cause to be
27 formed, a registered limited liability partnership to provide multi-
28 disciplinary services with one or more licensed professionals, subject
29 to the following conditions: (i) each partner of such limited liabil-
30 ity partnership must be licensed pursuant to title eight of the educa-
31 tion law to practice such partner's profession in this state; (ii)
32 each partner shall only practice such partner's profession as specified
33 in such partner's respective professional enabling statute under title
34 eight of the education law; and (iii) any clinical integration of the
35 professional practices under this section shall not alter, expand or
36 curtail the scope of practice of any of the partners; provided further
37 that: (A) no partner shall, directly or indirectly, interfere with the
38 clinical judgment or legitimate clinical practice of another partner;
39 and (B) no partner shall order or direct another partner to practice
40 beyond the scope of such partner's license. Each partner of a registered
41 limited liability partnership formed to provide dental services in this
42 state must be licensed pursuant to article 133 of the education law to
43 practice dentistry in this state. Each partner of a registered limited
44 liability partnership formed to provide veterinary services in this
45 state must be licensed pursuant to article 135 of the education law to
46 practice veterinary medicine in this state. Each partner of a registered
47 limited liability partnership formed to provide public accountancy
48 services as a firm, whose principal place of business is in this state
49 and who provides public accountancy services, must be licensed pursuant
50 to article 149 of the education law to practice public accountancy in
51 this state. Each partner of a registered limited liability partnership
52 formed to provide professional engineering, land surveying, geological
53 services, architectural and/or landscape architectural services in this
54 state must be licensed pursuant to article 145, article 147 and/or arti-
55 cle 148 of the education law to practice one or more of such professions
56 in this state. [Each partner of a registered limited liability partner-
A. 2588--A 9
1 ship formed to provide licensed clinical social work services in this
2 state must be licensed pursuant to article 154 of the education law to
3 practice clinical social work in this state.] Each partner of a regis-
4 tered limited liability partnership formed to provide creative arts
5 therapy services in this state must be licensed pursuant to article 163
6 of the education law to practice creative arts therapy in this state.
7 Each partner of a registered limited liability partnership formed to
8 provide marriage and family therapy services in this state must be
9 licensed pursuant to article 163 of the education law to practice
10 marriage and family therapy in this state. Each partner of a registered
11 limited liability partnership formed to provide mental health counseling
12 services in this state must be licensed pursuant to article 163 of the
13 education law to practice mental health counseling in this state. Each
14 partner of a registered limited liability partnership formed to provide
15 psychoanalysis services in this state must be licensed pursuant to arti-
16 cle 163 of the education law to practice psychoanalysis in this state.
17 [Each partner of a registered limited liability partnership formed to
18 provide applied behavior analysis service in this state must be licensed
19 or certified pursuant to article 167 of the education law to practice
20 applied behavior analysis in this state.] A registered limited liability
21 partnership formed to lawfully engage in the practice of public accoun-
22 tancy as a firm, as such practice is defined under article 149 of the
23 education law, shall be required to show (1) that a simple majority of
24 the ownership of the firm, in terms of financial interests and voting
25 rights held by the firm's owners, belongs to individuals licensed to
26 practice public accountancy in some state, and (2) that all partners of
27 a limited liability partnership whose principal place of business is in
28 this state, and who are engaged in the practice of public accountancy in
29 this state, hold a valid license issued under section seventy-four
30 hundred four of the education law. For purposes of this subdivision,
31 "financial interest" means capital stock, capital accounts, capital
32 contributions, capital interest, or interest in undistributed earnings
33 of a business entity. Although firms registered with the education
34 department may include non-licensee owners, the firm and its owners must
35 comply with rules promulgated by the state board of regents. Notwith-
36 standing the foregoing, a firm registered with the education department
37 may not have non-licensee owners if the firm's name includes the words
38 "certified public accountant," or "certified public accounts," or the
39 abbreviations "CPA" or "CPAs". Each non-licensee owner of a firm that is
40 formed under this section shall be (1) a natural person who actively
41 participates in the business of the firm or its affiliated entities, or
42 (2) an entity, including, but not limited to, a partnership or profes-
43 sional corporation, provided each beneficial owner of an equity interest
44 in such entity is a natural person who actively participates in the
45 business conducted by the firm or its affiliated entities. For purposes
46 of this subdivision, "actively participate" means to provide services to
47 clients or to otherwise individually take part in the day-to-day busi-
48 ness or management of the firm or an affiliated entity.
49 § 6. Subdivision (q) of section 121-1502 of the partnership law, as
50 amended by chapter 701 of the laws of 2023, is amended to read as
51 follows:
52 (q) Each partner of a foreign limited liability partnership which
53 provides medical services in this state must be licensed pursuant to
54 article 131 of the education law to practice medicine in the state [and
55 each]. Notwithstanding any other provision of this section, any person
56 licensed pursuant to article 131 of the education law to practice medi-
A. 2588--A 10
1 cine and any person licensed pursuant to articles 132, 137, 140, 141,
2 143, 144, 153, 154, 155, 156, 163, 167 or subdivision 3 of section 6902
3 of article 139 of the education law may form, or cause to be
4 formed, a registered limited liability partnership to provide multidis-
5 ciplinary services with one or more licensed professionals, subject to
6 the following conditions: (i) each partner of such limited liability
7 partnership must be licensed pursuant to title eight of the education
8 law to practice such partner's profession in this state; (ii) each
9 partner shall only practice such partner's profession as specified in
10 such partner's respective professional enabling statute under title
11 eight of the education law; and (iii) any clinical integration of the
12 professional practices under this section shall not alter, expand or
13 curtail the scope of practice of any of the partners; provided
14 further that: (A) no partner shall, directly or indirectly, interfere
15 with the clinical judgment or legitimate clinical practice of anoth-
16 er partner; and (B) no partner shall order or direct another partner to
17 practice beyond the scope of such partner's license. Each partner of a
18 foreign limited liability partnership which provides dental services in
19 the state must be licensed pursuant to article 133 of the education law
20 to practice dentistry in this state. Each partner of a foreign limited
21 liability partnership which provides veterinary service in the state
22 shall be licensed pursuant to article 135 of the education law to prac-
23 tice veterinary medicine in this state. Each partner of a foreign limit-
24 ed liability partnership which provides professional engineering, land
25 surveying, geological services, architectural and/or landscape architec-
26 tural services in this state must be licensed pursuant to article 145,
27 article 147 and/or article 148 of the education law to practice one or
28 more of such professions. Each partner of a foreign limited liability
29 partnership formed to provide public accountancy services as a firm,
30 whose principal place of business is in this state and who provides
31 public accountancy services, must be licensed pursuant to article 149 of
32 the education law to practice public accountancy in this state. [Each
33 partner of a foreign limited liability partnership which provides
34 licensed clinical social work services in this state must be licensed
35 pursuant to article 154 of the education law to practice licensed clin-
36 ical social work in this state.] Each partner of a foreign limited
37 liability partnership which provides creative arts therapy services in
38 this state must be licensed pursuant to article 163 of the education law
39 to practice creative arts therapy in this state. Each partner of a
40 foreign limited liability partnership which provides marriage and family
41 therapy services in this state must be licensed pursuant to article 163
42 of the education law to practice marriage and family therapy in this
43 state. Each partner of a foreign limited liability partnership which
44 provides mental health counseling services in this state must be
45 licensed pursuant to article 163 of the education law to practice mental
46 health counseling in this state. Each partner of a foreign limited
47 liability partnership which provides psychoanalysis services in this
48 state must be licensed pursuant to article 163 of the education law to
49 practice psychoanalysis in this state. [Each partner of a foreign limit-
50 ed liability partnership which provides applied behavior analysis
51 services in this state must be licensed or certified pursuant to article
52 167 of the education law to practice applied behavior analysis in this
53 state.] A foreign limited liability partnership formed to lawfully
54 engage in the practice of public accountancy as a firm, as such practice
55 is defined under article 149 of the education law, shall be required to
56 show (1) that a simple majority of the ownership of the firm, in terms
A. 2588--A 11
1 of financial interests and voting rights held by the firm's owners,
2 belongs to individuals licensed to practice public accountancy in some
3 state, and (2) that all partners of the foreign limited liability part-
4 nership whose principal place of business is in this state, and who are
5 engaged in the practice of public accountancy in this state, hold a
6 valid license issued under section seventy-four hundred four of the
7 education law. For purposes of this subdivision, "financial interest"
8 means capital stock, capital accounts, capital contributions, capital
9 interest, or interest in undistributed earnings of a business entity.
10 Although firms registered with the education department may include
11 non-licensee owners, a registered firm and its owners must comply with
12 rules promulgated by the state board of regents. Notwithstanding the
13 foregoing, a firm registered with the education department may not have
14 non-licensee owners if the firm's name includes the words "certified
15 public accountant," or "certified public accountants," or the abbrevi-
16 ations "CPA" or "CPAs". Each non-licensee owner of a firm that is formed
17 under this section shall be (1) a natural person who actively partic-
18 ipates in the business of the firm or its affiliated entities, or (2) an
19 entity, including, but not limited to, a partnership or professional
20 corporation, provided that each beneficial owner of an equity interest
21 in such entity is a natural person who actively participates in the
22 business conducted by the firm or its affiliated entities. For purposes
23 of this subdivision, "actively participate" means to provide services to
24 clients or to otherwise individually take part in the day-to-day busi-
25 ness or management of the firm or an affiliated entity.
26 § 7. Section 6509-a of the education law, as amended by chapter 555 of
27 the laws of 1993, is amended to read as follows:
28 § 6509-a. Additional definition of professional misconduct; limited
29 application. Notwithstanding any inconsistent provision of this article
30 or of any other provision of law to the contrary, the license or regis-
31 tration of a person subject to the provisions of articles one hundred
32 thirty-two, one hundred thirty-three, one hundred thirty-six, one
33 hundred thirty-seven, one hundred thirty-nine, one hundred forty-one,
34 one hundred forty-three, one hundred forty-four, one hundred fifty-six,
35 one hundred fifty-nine and one hundred sixty-four of this chapter may be
36 revoked, suspended or annulled or such person may be subject to any
37 other penalty provided in section sixty-five hundred eleven of this
38 article in accordance with the provisions and procedure of this article
39 for the following:
40 That any person subject to the above enumerated articles, has directly
41 or indirectly requested, received or participated in the division,
42 transference, assignment, rebate, splitting or refunding of a fee for,
43 or has directly requested, received or profited by means of a credit or
44 other valuable consideration as a commission, discount or gratuity in
45 connection with the furnishing of professional care, or service, includ-
46 ing x-ray examination and treatment, or for or in connection with the
47 sale, rental, supplying or furnishing of clinical laboratory services or
48 supplies, x-ray laboratory services or supplies, inhalation therapy
49 service or equipment, ambulance service, hospital or medical supplies,
50 physiotherapy or other therapeutic service or equipment, artificial
51 limbs, teeth or eyes, orthopedic or surgical appliances or supplies,
52 optical appliances, supplies or equipment, devices for aid of hearing,
53 drugs, medication or medical supplies or any other goods, services or
54 supplies prescribed for medical diagnosis, care or treatment under this
55 chapter, except payment, not to exceed thirty-three and one-third per
56 centum of any fee received for x-ray examination, diagnosis or treat-
A. 2588--A 12
1 ment, to any hospital furnishing facilities for such examination, diag-
2 nosis or treatment. Nothing contained in this section shall prohibit
3 such persons from practicing as partners, in groups or as a professional
4 corporation or as a university faculty practice corporation nor from
5 pooling fees and moneys received, either by the partnerships, profes-
6 sional corporations, university faculty practice corporations or groups
7 by the individual members thereof, for professional services furnished
8 by any individual professional member, or employee of such partnership,
9 corporation or group, nor shall the professionals constituting the part-
10 nerships, corporations or groups be prohibited from sharing, dividing or
11 apportioning the fees and moneys received by them or by the partnership,
12 corporation or group in accordance with a partnership or other agree-
13 ment; provided that no such practice as partners, corporations or in
14 groups or pooling of fees or moneys received or shared, division or
15 apportionment of fees shall be permitted with respect to care and treat-
16 ment under the workers' compensation law except as expressly authorized
17 by the workers' compensation law. Nothing contained in this section
18 shall prohibit a multidisciplinary services practice formed pursuant to
19 subdivision (a) of section twelve hundred three of the limited liability
20 company law, subdivision (b) of section twelve hundred seven of the
21 limited liability company law, subdivision (a) of section thirteen
22 hundred one of the limited liability company law, paragraph (a) of
23 section fifteen hundred three of the business corporation law, subdivi-
24 sion (q) of section 121-1500 of the partnership law, or subdivision (q)
25 of section 121-1502 of the partnership law from pooling fees or monies
26 received. Nothing contained in this chapter shall prohibit a medical or
27 dental expense indemnity corporation pursuant to its contract with the
28 subscriber from prorationing a medical or dental expense indemnity
29 allowance among two or more professionals in proportion to the services
30 rendered by each such professional at the request of the subscriber,
31 provided that prior to payment thereof such professionals shall submit
32 both to the medical or dental expense indemnity corporation and to the
33 subscriber statements itemizing the services rendered by each such
34 professional and the charges therefor.
35 § 8. Subdivision 19 of section 6530 of the education law, as added by
36 chapter 606 of the laws of 1991, is amended to read as follows:
37 19. Permitting any person to share in the fees for professional
38 services, other than: a partner, employee, associate in a professional
39 firm or corporation, professional subcontractor or consultant authorized
40 to practice medicine, [or] a legally authorized trainee practicing under
41 the supervision of a licensee, or an authorized professional licensed
42 pursuant to article one hundred thirty-one, one hundred thirty-two, one
43 hundred thirty-seven, one hundred forty, one hundred forty-one, one
44 hundred forty-three, one hundred forty-four, one hundred fifty-three,
45 one hundred fifty-four, one hundred fifty-five, one hundred fifty-six,
46 one hundred fifty-nine, one hundred sixty-three, one hundred sixty-seven
47 or subdivision three of section sixty-nine hundred two of article one
48 hundred thirty-nine of this chapter providing professional services in
49 the same practice. This prohibition shall include any arrangement or
50 agreement whereby the amount received in payment for furnishing space,
51 facilities, equipment or personnel services used by a licensee consti-
52 tutes a percentage of, or is otherwise dependent upon, the income or
53 receipts of the licensee from such practice, except as otherwise
54 provided by law with respect to a facility licensed pursuant to article
55 twenty-eight of the public health law or article thirteen of the mental
56 hygiene law;
A. 2588--A 13
1 § 9. Section 6531 of the education law, as amended by chapter 555 of
2 the laws of 1993, is amended to read as follows:
3 § 6531. Additional definition of professional misconduct, limited
4 application. Notwithstanding any inconsistent provision of this article
5 or any other provisions of law to the contrary, the license or registra-
6 tion of a person subject to the provisions of this article and article
7 one hundred thirty-one-B of this chapter may be revoked, suspended, or
8 annulled or such person may be subject to any other penalty provided in
9 section two hundred thirty-a of the public health law in accordance with
10 the provisions and procedures of this article for the following:
11 That any person subject to the above-enumerated articles has directly
12 or indirectly requested, received or participated in the division,
13 transference, assignment, rebate, splitting, or refunding of a fee for,
14 or has directly requested, received or profited by means of a credit or
15 other valuable consideration as a commission, discount or gratuity, in
16 connection with the furnishing of professional care or service, includ-
17 ing x-ray examination and treatment, or for or in connection with the
18 sale, rental, supplying, or furnishing of clinical laboratory services
19 or supplies, x-ray laboratory services or supplies, inhalation therapy
20 service or equipment, ambulance service, hospital or medical supplies,
21 physiotherapy or other therapeutic service or equipment, artificial
22 limbs, teeth or eyes, orthopedic or surgical appliances or supplies,
23 optical appliances, supplies, or equipment, devices for aid of hearing,
24 drugs, medication, or medical supplies, or any other goods, services, or
25 supplies prescribed for medical diagnosis, care, or treatment under this
26 chapter, except payment, not to exceed thirty-three and one-third
27 percent of any fee received for x-ray examination, diagnosis, or treat-
28 ment, to any hospital furnishing facilities for such examination, diag-
29 nosis, or treatment. Nothing contained in this section shall prohibit
30 such persons from practicing as partners, in groups or as a professional
31 corporation or as a university faculty practice corporation, nor from
32 pooling fees and moneys received, either by the partnerships, profes-
33 sional corporations, or university faculty practice corporations or
34 groups by the individual members thereof, for professional services
35 furnished by an individual professional member, or employee of such
36 partnership, corporation, or group, nor shall the professionals consti-
37 tuting the partnerships, corporations or groups be prohibited from shar-
38 ing, dividing, or apportioning the fees and moneys received by them or
39 by the partnership, corporation, or group in accordance with a partner-
40 ship or other agreement; provided that no such practice as partners,
41 corporations, or groups, or pooling of fees or moneys received or
42 shared, division or apportionment of fees shall be permitted with
43 respect to and treatment under the workers' compensation law. Nothing
44 contained in this section shall prohibit a multidisciplinary services
45 practice formed pursuant to subdivision (a) of section twelve hundred
46 three of the limited liability company law, subdivision (b) of section
47 twelve hundred seven of the limited liability company law, subdivision
48 (a) of section thirteen hundred one of the limited liability company
49 law, paragraph (a) of section fifteen hundred three of the business
50 corporation law, subdivision (q) of section 121-1500 of the partnership
51 law, or subdivision (q) of section 121-1502 of the partnership law from
52 pooling fees or monies received. Nothing contained in this chapter shall
53 prohibit a corporation licensed pursuant to article forty-three of the
54 insurance law pursuant to its contract with the subscribed from prora-
55 tioning a medical or dental expenses indemnity allowance among two or
56 more professionals in proportion to the services rendered by each such
A. 2588--A 14
1 professional at the request of the subscriber, provided that prior to
2 payment thereof such professionals shall submit both to the corporation
3 licensed pursuant to article forty-three of the insurance law and to the
4 subscriber statements itemizing the services rendered by each such
5 professional and the charges therefor.
6 § 10. Subdivision 1 of section 2801 of the public health law, as
7 amended by section 2 of part E of chapter 57 of the laws of 2023, is
8 amended to read as follows:
9 1. "Hospital" means a facility or institution engaged principally in
10 providing services by or under the supervision of a physician or, in the
11 case of a dental clinic or dental dispensary, of a dentist, or, in the
12 case of a midwifery birth center, of a midwife, for the prevention,
13 diagnosis or treatment of human disease, pain, injury, deformity or
14 physical condition, including, but not limited to, a general hospital,
15 public health center, diagnostic center, treatment center, a rural emer-
16 gency hospital under 42 USC 1395x(kkk), or successor provisions, dental
17 clinic, dental dispensary, rehabilitation center other than a facility
18 used solely for vocational rehabilitation, nursing home, tuberculosis
19 hospital, chronic disease hospital, maternity hospital, midwifery birth
20 center, lying-in-asylum, out-patient department, out-patient lodge,
21 dispensary and a laboratory or central service facility serving one or
22 more such institutions, but the term hospital shall not include an
23 institution, sanitarium or other facility engaged principally in provid-
24 ing services for the prevention, diagnosis or treatment of mental disa-
25 bility and which is subject to the powers of visitation, examination,
26 inspection and investigation of the department of mental hygiene except
27 for those distinct parts of such a facility which provide hospital
28 service. The provisions of this article shall not apply to a facility or
29 institution engaged principally in providing services by or under the
30 supervision of the bona fide members and adherents of a recognized reli-
31 gious organization whose teachings include reliance on spiritual means
32 through prayer alone for healing in the practice of the religion of such
33 organization and where services are provided in accordance with those
34 teachings or to a multidisciplinary services practice formed pursuant to
35 subdivision (a) of section twelve hundred three of the limited liability
36 company law, subdivision (b) of section twelve hundred seven of the
37 limited liability company law, subdivision (a) of section thirteen
38 hundred one of the limited liability company law, paragraph (a) of
39 section fifteen hundred three of the business corporation law, subdivi-
40 sion (q) of section 121-1500 of the partnership law, or subdivision (q)
41 of section 121-1502 of the partnership law. No provision of this article
42 or any other provision of law shall be construed to: (a) limit the
43 volume of mental health, substance use disorder services or develop-
44 mental disability services that can be provided by a provider of primary
45 care services licensed under this article and authorized to provide
46 integrated services in accordance with regulations issued by the commis-
47 sioner in consultation with the commissioner of the office of mental
48 health, the commissioner of the office of [alcoholism] addiction
49 services and [substance abuse services] supports and the commissioner of
50 the office for people with developmental disabilities, including regu-
51 lations issued pursuant to subdivision seven of section three hundred
52 sixty-five-l of the social services law or part L of chapter fifty-six
53 of the laws of two thousand twelve; (b) require a provider licensed
54 pursuant to article thirty-one of the mental hygiene law or certified
55 pursuant to article sixteen or article thirty-two of the mental hygiene
56 law to obtain an operating certificate from the department if such
A. 2588--A 15
1 provider has been authorized to provide integrated services in accord-
2 ance with regulations issued by the commissioner in consultation with
3 the commissioner of the office of mental health, the commissioner of the
4 office of [alcoholism] addiction services and [substance abuse services]
5 supports and the commissioner of the office for people with develop-
6 mental disabilities, including regulations issued pursuant to subdivi-
7 sion seven of section three hundred sixty-five-l of the social services
8 law or part L of chapter fifty-six of the laws of two thousand twelve.
9 § 11. This act shall take effect on the thirtieth day after it shall
10 have become a law.
